During the Vice-Presidential debate last night, Gov. Sarah Palin (R-AK) spent ample time claiming that Sen. John McCain’s (R-AZ) economic plan will create new jobs and cause the economy to grow:
PALIN: We can speak in agreement here that darn right we need tax relief for Americans so that jobs can be created here…We do need the private sector to be able to keep more of what we earn and produce. [...]
You’re going to have a choice in just a few weeks here on either supporting a ticket that wants to create jobs and bolster our economy and win the war or you’re going to be supporting a ticket that wants to increase taxes, which ultimately kills jobs, and is going to hurt our economy.
The McCain/Palin economic plan consists of a cut in the corporate tax rate, a permanent research and development tax credit, and a provision allowing full expensing of business equipment, which they claim “focuses on how to help our economy create more good jobs.”
This plan, however, spends hundreds of billions of dollars, while not even creating enough jobs to keep up with the number of new workers entering the workforce.
In an analysis for the Center for American Progress Action Fund, Brian Levine finds that McCain’s plan “would create only about 450,000 jobs in 2009, at a cost of $280 billion.” Meanwhile, “the United States needs to generate 1.5 million jobs a year just to keep up with the new workers entering the labor force.”
Furthermore, Levine notes that “the number of jobs created would be decidedly unimpressive relative to the size of the tax break given to corporations.” By cutting the corporate tax rate from 35% to 25%, McCain and Palin will be giving $175 billion in tax breaks to America’s corporations, including $45 billion to the Fortune 200. And as the Congressional Budget Office has pointed out, a corporate tax cut “does not create an incentive for [corporations] to spend more on labor.”
Today, it was announced that employers cut 159,000 jobs in September, and the unemployment rate did not drop from its seven-year high of 6.1%. Thus, a plan that actually creates jobs is vital, and as Levine concludes, “a well-designed economic stimulus plan, costing the same amount [as McCain's plan], would create 2 million jobs.” The McCain/Palin plan, simply put, costs a lot while doing nowhere near enough.